Summary
- The Swiss Federal Council adopted a dispatch on 12 August 2026 concerning a temporary VAT increase intended to finance priority security and defence expenditure. The proposed measure would apply from 2028 for 12 years. [vatupdate.com]
- The standard VAT rate would increase by 0.5 percentage points and the special accommodation rate by 0.3 percentage points. The reduced rate applying to essential goods such as food and medicines would remain unchanged. [lenews.ch]
- The proposal remains subject to the Swiss legislative and referendum process. Businesses should also distinguish this temporary defence measure from the separate VAT increase connected with financing the 13th state pension payment.
Extended article
Switzerland’s Federal Council has adopted a dispatch proposing a temporary increase in VAT to finance additional defence and security expenditure.
The proposal would add 0.5 percentage points to the standard rate and 0.3 percentage points to the special accommodation rate. It would leave the reduced rate unchanged. Revenue would be earmarked for priority defence expenditure, and the increase would operate for 12 years. [lenews.ch]
The proposal should not yet be treated as a final rate change. It must proceed through Switzerland’s constitutional and legislative process and is expected to require approval in a mandatory referendum.
A separate proposed VAT increase concerns the financing of Switzerland’s 13th state pension payment. Consequently, businesses should monitor the cumulative effect of the two measures rather than considering either proposal in isolation. [kpmg.com], [vatcalc.com]
External sources: Swiss defence-financing VAT proposal and separate Swiss pension-financing VAT measure. [vatupdate.com], [kpmg.com]
